BILL NUMBER: AB 2107	CHAPTERED  09/14/00

	CHAPTER   442
	FILED WITH SECRETARY OF STATE   SEPTEMBER 14, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 13, 2000
	PASSED THE ASSEMBLY   AUGUST 29, 2000
	PASSED THE SENATE   AUGUST 28, 2000
	AMENDED IN SENATE   AUGUST 24, 2000
	AMENDED IN SENATE   AUGUST 18, 2000
	AMENDED IN SENATE   AUGUST 7, 2000
	AMENDED IN ASSEMBLY   MAY 31, 2000
	AMENDED IN ASSEMBLY   MAY 16, 2000
	AMENDED IN ASSEMBLY   APRIL 24, 2000
	AMENDED IN ASSEMBLY   APRIL 3, 2000

INTRODUCED BY   Assembly Member Scott
   (Coauthor:  Assembly Member Jackson)

                        FEBRUARY 22, 2000

   An act to add Section 6177 to the Business and Professions Code,
and to amend and renumber Section 10193 of, to amend Section 10234.8
of, and to add Section 789.8 to, the Insurance Code, and to amend
Section 15610.30 of the Welfare and Institutions Code, relating to
elder abuse.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2107, Scott.  Elder abuse.
   (1) Existing law imposes on all insurers, brokers, agents, and
others engaged in the business of Medicare supplemental insurance and
long-term care insurance with a policyholder, a duty of honesty,
good faith, and fair dealing.
   This bill would impose the duty of honesty, good faith, and fair
dealing on insurers, brokers, agents, and others engaged in the
business of Medicare supplemental insurance and long-term care
insurance with respect to prospective policyholders.
   The bill would only permit life agents, on or after July 1, 2001,
to sell or offer for sale to an elder or his or her agent any
financial product on the basis of the product's treatment under
Medi-Cal after providing the elder or his or her agent with a
specified disclosure, in writing, explaining the resource and income
requirements of the Medi-Cal program, including, but not limited to,
certain exempt resources, certain protections against spousal
impoverishment, and certain circumstances under which an interest in
a home may be transferred without affecting Medi-Cal eligibility.
The bill would exclude from the application of these disclosure
provisions credit life insurance, as defined.
   (2) Existing law prohibits conflicts of interest between an
attorney and client.
   This bill would require the State Bar to make a report, by
December 31 of each year, to the Legislature on the provision of
financial services by lawyers to elders, as specified.  The report
would include the number of complaints filed and investigations
initiated, the type of charges made, and the number and nature of
disciplinary actions taken by the State Bar.
   (3) Existing law defines financial abuse for the purpose of
reporting and investigating elder and dependent adult abuse.
   This bill would revise that definition.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 6177 is added to the Business and Professions
Code, to read:
   6177.  The State Bar by December 31 of each year shall report to
the Legislature on the number of complaints filed against California
attorneys alleging a violation of this article.  The report shall
also include the type of charges made in each complaint, the number
of resulting investigations initiated, and the number and nature of
any disciplinary actions take by the State Bar for violations of this
article.
  SEC. 2.  Section 789.8 is added to the Insurance Code, to read:
   789.8.  (a)  "Elder" for purposes of this section means any person
residing in this state, 65 years of age or older.
   (b) If a life agent offers to sell to an elder any life insurance
or annuity product, the life agent shall advise an elder or elder's
agent in writing that the sale or liquidation of any stock, bond,
IRA, certificate of deposit, mutual fund, annuity, or other asset to
fund the purchase of this product may have tax consequences, early
withdrawal penalties, or other costs or penalties as a result of the
sale or liquidation, and that the elder or elder's agent may wish to
consult independent legal or financial advice before selling or
liquidating any assets and prior to the purchase of any life or
annuity products being solicited, offered for sale, or sold.  This
section does not apply to a credit life insurance product as defined
in Section 779.2.
   (c) A life agent who offers for sale or sells a financial product
to an elder on the basis of the product's treatment under the
Medi-Cal program may not negligently misrepresent the treatment of
any asset under the statutes and rules and regulations of the
Medi-Cal program, as it pertains to the determination of the elder's
eligibility for any program of public assistance.
   (d) A life agent who offers for sale or sells any financial
product on the basis of its treatment under the Medi-Cal program
shall provide, in writing, the following disclosure to the elder or
the elder's agent:
      "NOTICE REGARDING STANDARDS FOR MEDI-CAL ELIGIBILITY

   If you or your spouse are considering purchasing a financial
product based on its treatment under the Medi-Cal program, read this
important message!
   You or your spouse do not have to use up all of your savings
before applying for Medi-Cal.
      UNMARRIED RESIDENT

   An unmarried resident may be eligible for Medi-Cal benefits if he
or she has less than (insert amount of individual's resource
allowance) in countable resources.
   The Medi-Cal recipient is allowed to keep from his or her monthly
income a personal allowance of (insert amount of personal needs
allowance) plus the amount of any health insurance premiums paid.
The remainder of the monthly income is paid to the nursing facility
as a monthly share of cost.
      MARRIED RESIDENT

   COMMUNITY SPOUSE RESOURCE ALLOWANCE:  If one spouse lives in a
nursing facility, and the other spouse does not live in a facility,
the Medi-Cal program will pay some or all of the nursing facility
costs as long as the couple together does not have more than (insert
amount of community countable assets).
   MINIMUM MONTHLY MAINTENANCE NEEDS ALLOWANCE:  If a spouse is
eligible for Medi-Cal payment of nursing facility costs, the spouse
living at home is allowed to keep a monthly income of at least his or
her individual monthly income or (insert amount of the minimum
monthly maintenance needs allowance), whichever is greater.
      FAIR HEARINGS AND COURT ORDERS

   Under certain circumstances, an at-home spouse can obtain an order
from an administrative law judge or court that will allow the
at-home spouse to retain additional resources or income.  The order
may allow the couple to retain more than (insert amount of community
spouse resource allowance plus individual's resource allowance) in
countable resources.  The order also may allow the at-home spouse to
retain more than (insert amount of the monthly maintenance need
allowance) in monthly income.
      REAL AND PERSONAL PROPERTY EXEMPTIONS

   Many of your assets may already be exempt.  Exempt means that the
assets are not counted when determining eligibility for Medi-Cal.
      REAL PROPERTY EXEMPTIONS

   ONE PRINCIPAL RESIDENCE.  One property used as a home is exempt.
The home will remain exempt in determining eligibility if the
applicant intends to return home someday.
   The home also continues to be exempt if the applicant's spouse or
dependent relative continues to live in it.
   Money received from the sale of a home can be exempt for up to six
months if the money is going to be used for the purchase of another
home.
   REAL PROPERTY USED IN A BUSINESS OR TRADE.  Real estate used in a
trade or business is exempt regardless of its equity value and
whether it produces income.
      PERSONAL PROPERTY AND OTHER EXEMPT ASSETS

   IRAs, KEOGHs, AND OTHER WORK-RELATED PENSION PLANS.  These funds
are exempt if the family member whose name it is in does not want
Medi-Cal.  If held in the name of a person who wants Medi-Cal and
payments of principal and interest are being received, the balance is
considered unavailable and is not counted.  It is not necessary to
annuitize, convert to an annuity, or otherwise change the form of the
assets in order for them to be unavailable.

   PERSONAL PROPERTY USED IN A TRADE OR BUSINESS.

   ONE MOTOR VEHICLE.

   IRREVOCABLE BURIAL TRUSTS OR IRREVOCABLE PREPAID BURIAL CONTRACTS.

   THERE MAY BE OTHER ASSETS THAT MAY BE EXEMPT.

   This is only a brief description of the Medi-Cal eligibility
rules, for more detailed information, you should call your county
welfare department.  Also, you are advised to contact a legal
services program for seniors or an attorney that is not connected
with the sale of this product.

   I have read the above notice and have received a copy.  Dated:
_______________ Signature:  ________________"

   The statement required in this subdivision shall be printed in at
least 12-point type, shall be clearly separate from any other
document or writing, and shall be signed by the prospective purchaser
and that person's spouse, and legal representative, if any.
   (e) The State Department of Health Services shall update this form
to ensure consistency with state and federal law and make the
disclosure available to agents and brokers through its Internet
website.
   (f) Nothing in this section allows or is intended to allow the
unlawful practice of law.
   (g) Subdivisions (b) and (d) shall become operative on July 1,
2001.
  SEC. 3.  Section 10193 of the Insurance Code is amended and
renumbered to read:
   10192.55.  (a) With regard to Medicare supplement insurance, all
insurers, brokers, agents, and others engaged in the business of
insurance owe a policyholder or a prospective policyholder a duty of
honesty, and a duty of good faith and fair dealing.
   (b) Conduct of an insurer, broker, or agent during the offer and
sale of a policy previous to the purchase is relevant to any action
alleging a breach of the duty of honesty, and a duty of good faith
and fair dealing.
  SEC. 4.  Section 10234.8 of the Insurance Code is amended to read:

   10234.8.  (a) With regard to long-term care insurance, all
insurers, brokers, agents, and others engaged in the business of
insurance owe a policyholder or a prospective policyholder a duty of
honesty, and a duty of good faith and fair dealing.
   (b) Conduct of an insurer, broker, or agent during the offer and
sale of a policy previous to the purchase is relevant to any action
alleging a breach of the duty of honesty, and a duty of good faith
and fair dealing.
  SEC. 5.  Section 15610.30 of the Welfare and Institutions Code is
amended to read:
   15610.30.  (a)  "Financial abuse" of an elder or dependent adult
occurs when a person or entity does any of the following:
   (1) Takes, secretes, appropriates, or retains real or personal
property of an elder or dependent adult to a wrongful use or with
intent to defraud, or both.
   (2) Assists in taking, secreting, appropriating, or retaining real
or personal property of an elder or dependent adult to a wrongful
use or with intent to defraud, or both.
   (b) A person or entity shall be deemed to have taken, secreted,
appropriated, or retained property for a wrongful use if, among other
things, the person or entity takes, secretes, appropriates or
retains possession of property in bad faith.
   (1) A person or entity shall be deemed to have acted in bad faith
if the person or entity knew or should have known that the elder or
dependent adult had the right to have the property transferred or
made readily available to the elder or dependent adult or to his or
her representative.
   (2) For purposes of this section, a person or entity should have
known of a right specified in paragraph (1) if, on the basis of the
information received by the person or entity or the person or entity'
s authorized third party, or both, it is obvious to a reasonable
person that the elder or dependent adult has a right specified in
paragraph (1).
   (c) For purposes of this section, "representative" means a person
or entity that is either of the following:
   (1) A conservator, trustee, or other representative of the estate
of an elder or dependent adult.
   (2) An attorney-in-fact of an elder or dependent adult who acts
within the authority of the power of attorney.
